Water demand in urban households and tariff changes in Bogotá

Edwin Oswaldo Gil Mateus

Abstract

Standard consumer theory suggests that economic agents respond to changes in prices of goods. However, all agents do not respond as quickly to these changes, for some particular goods, which is the case of drinking water. This article analyzes the correlation between the consumption of water bycontract account for each layer and the base charge component of the tariff, for which we estimate the elasticity of consumption with respect to backwardness of a rate period. This raises the basic variable rate is an effective tool for controlling excessive water consumption in the lower strata —1, 2 and 3—; in the other hand, this is not an effective mechanism in reducing consumption by home, to the upper strata -4, 5 and 6 -. Finally, alternatives are suggested in some literature, aimed at establishing management programs of urban water demand.

Keywords

Empirical analysis of consumption; Water demand management; Drinking water

References

BARRETT, Greg. Water Conservation: The Role of Price and Regulation in Residential Water Consumption. Economic Papers, 23(3): 271-285, 2004.

BYRNES, Joel, CRASE, Lin, DOLLERY, Brian. Regulation Versus Pricing in Urban Water Policy: The Case of the Australian National Water Initiative. The Australian Journal of Agricultural and Resource Economics, (50): 437-449, 2006.